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I. BASIC PROVISIONS
1. Subject of
the Law and General Principles
Article 1
This law governs the conditions and the procedures for changing the
ownership of socially or state owned capital (hereinafter:
privatization).
Article 2
Privatization shall be based on the following general principles:
1. Creation of conditions for economic development and social stability;
2. Transparency;
3. Flexibility; and
4. Formation of sale price in accordance with market conditions.
2. Scope of privatization and entities to be privatized
Article 3
The scope of privatization consists of socially owned and state owned
capital (hereinafter: capital) of enterprises, institutions, and other
legal entities (hereinafter: entities to be privatized), unless
otherwise provided for in special regulations.
The privatization process may also involve the sale of property, in
whole or in part, or sale of certain parts of the entities to be
privatized.
Provisions of this law shall be applied to entities to be privatized,
which have their registered office located on the territory of the
Republic of Serbia.
Natural resources and goods in public use, as well as goods of general
interest, shall not be included in the scope of privatization.
3. Entities responsible for privatization implementation
Article 4
The entities responsible for implementing privatization shall be:
1. Agency for Privatization;
2. Share Fund; and
3. Central Registry for Securities.
During the privatization process, the Privatization Registry shall be
maintained.
Article 5
The Agency for Privatization (hereinafter: the Agency) is a legal entity
that promotes, initiates, carries out and controls the implementation of
privatization in accordance with the law.
A separate regulation shall specify the status, rights and duties of the
Privatization Agency as well as other issues of importance for its work.
Article 6
The Share Fund is the legal entity that shall receive shares that are
transferred to it for sale, under the conditions and in the manner
prescribed by this law and the Law on Share Fund.
Article 7
The Central Registry for Securities (hereinafter: the Central Registry)
maintains a comprehensive database of all issued shares, as well as any
changes to this data in accordance with the law.
Article 8
The Privatization Registry records the part of capital of the entities
to be privatized, expressed in shares, which shall be transferred to
citizens free of charge in accordance with this law (hereinafter:
Privatization Registry).
The Privatization Registry shall be maintained within the ministry in
charge of privatization affairs.
The Privatization Registry contains: name of the entity to be privatized
whose portion of capital shall be recorded in Privatization Registry,
data on the value of capital and number of shares which shall be
recorded, and other data.
Minister in charge of privatization affairs shall specify the content
and mode of management of the Privatization Registry.
4. Models
of Privatization
Article 9
The models of privatization are:
1. Sale of capital;
2. Transfer of capital free of charge.
Article 10
The sale of capital and property of the entity to be privatized shall be
undertaken by the following methods:
1. Public tender;
2. Public auction.
Article 11
The transfer of capital free of charge shall be implemented upon
completion of the sale of the capital through:
1. Transfer of shares to employees;
2. Transfer of shares to citizens.
5. Purchasers in privatization process
Article 12
The purchasers of capital or property may be domestic or foreign legal
entities or individuals, in accordance with the law.
A subsidiary of the entity to be privatized may not be a purchaser of
either the capital or the property of the entity to be privatized.
A domestic legal entity or individual may be the purchaser of the
capital or property, pursuant to this law, only upon submission of
sufficient evidence indicating fulfillment of all the obligations
determined by the Law on one-time taxation of extra income and extra
property gained by taking advantage of special benefits, or submission
of evidence of tax exemption pertaining to this law.
Any Contract of sale pursuant to Article 41 of this law that is in
conflict with paragraph 3 of this Article is invalid.
6. Payment
instruments in Privatization
Article 13
Payment in privatization may be effected by either domestic or foreign
freely convertible currency.
Payment may also be effected by bonds issued on account of unpaid
foreign currency citizens' savings to individuals who are citizens of
the Republic of Serbia, and which mature on or before the date of the
sale of capital or property.
Except as provided in paragraphs 1 and 2 of this article, payment may
also be effected by bonds on account of unpaid foreign currency
citizens' savings to individuals who are citizens of the Republic of
Serbia, irrespective of their maturity date, in the case that, in the
sale through public auction, the property or capital was not sold by
means of payment referred to in paragraphs 1 and 2 of this article.
7. Privatization deadlines
Article 14
The entities to be privatized with socially owned capital are obliged to
carry out the privatization procedure within a maximum of four years
from the effective date of this law.
Privatization of the entities to be privatized with social capital,
which have not been privatized in the period set by paragraph 1 of this
article, shall be carried out by the Privatization Agency in accordance
with the law.
8. Compensation for nationalized property
Article 15
Where property expropriated from individuals or legal entities by the
regulations governing the expropriation of property is included in the
privatization, and which is determined by the separate regulation on
restitution of the property (hereinafter: nationalized property), the
former owners of such nationalized property shall be compensated solely
from the funds to be allocated for such purposes by the Republic of
Serbia. |
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II. PREPARATION FOR
PRIVATIZATION
1. Launching of
Privatization Procedure
Article 16
The privatization procedure shall commence by the initiative of the
competent body of the entity to be privatized (hereinafter: the
initiative) and the drafting of the prospectus for privatization
(hereinafter: the prospectus).
Initiative, in accordance with this law, is an act of the entity to be
privatized which expresses its intention to implement privatization and
shall be submitted in a written form.
The initiative shall be submitted to the workers' union of the entity to
be privatized, and the employees shall be informed in accordance with
the general regulation of the entity to be privatized.
The initiative and the prospectus shall be submitted to the
Privatization Agency within five days of the date of the initiative.
The Privatization Agency or the ministry in charge of privatization
affairs may also launch the initiative.
In the case referred to in paragraph 5 of this article, the entity to be
privatized is obliged to deliver to the Agency the prospectus within
seven days from the date on which it receives the initiative.
Article 17
Initiative for the privatization in entities with majority state owned
capital shall be submitted by the Agency to the Government of the
Republic of Serbia for the purpose of obtaining approval.
2. Prospectus
Article 18
The prospectus, in accordance with this law, is a description of the
main data on the entity to be privatized.
Prospectus form shall be signed by the Minister in charge of
privatization affairs.
The Agency shall advertise the prospectus in the mass media (press,
television and Internet) within 15 days from the date on which the
prospectus was delivered.
The advertising referred to in paragraph 3 of this article shall be for
the purpose of gathering data on the number of potential purchasers.
A potential purchaser shall express its interest in buying the capital
and/or the property of the entity to be privatized in writing and notify
both the entity to be privatized and the Agency, within the period
determined by the Agency in the public notice.
The cost of advertising the prospectus shall be born by the entity
undergoing privatization.
The Agency shall, within 5 days after the expiration of the deadline for
collecting data on the number of potential buyers, notify the entities
to be privatized about the method of privatization or on need for
restructuring, in accordance with this law.
3. Restructuring in privatization procedure
Article 19
If the Agency evaluates that the capital and property of the entity to
be privatized cannot, without prior restructuring, be privatized
according to the methods of public tender or public auction, the entity
to be privatized shall be obliged to undergo restructuring in
privatization procedure in accordance with this law.
The restructuring in privatization procedure (hereinafter:
restructuring) in accordance with this law shall mean statutory or
organizational changes, settlement of debtor-creditor relationships and
other changes regarding the entity to be privatized, and which enable
sale of the capital or property of the entity.
The Agency may decide to undertake the restructuring procedure or to
instruct the competent body of the entity to be privatized to submit the
restructuring program within the period and in the manner defined by
this law.
Article 20
Within the framework of the restructuring program:
1. Creditors can, in whole or in part, write off debt's principal,
corresponding interest or other demands;
2. Creditors with a majority of state owned capital may convert their
money claims into capital of the entity to be privatized.
Legal operations referred to in paragraph 1 of this article shall be
valid only in the case where restructuring is accomplished entirely in
accordance with the restructuring program, which ends with the sale of
capital or property of the entity to be privatized.
The entities to be privatized, in which restructuring has been
performed, are obliged to sell capital or property, including the
capital converted in accordance with the paragraph 1. point 2. of this
article, through the methods of public tender or public auction.
During the implementation of restructuring the creditors cannot take
actions of forced collection of their unpaid due debts.
The Government of the Republic of Serbia shall prescribe in more detail
the procedure and manner of restructuring.
4. Privatization documents
Article 21
The entity to be privatized by public tender shall prepare the
documentation in compliance with the regulation referred to in article
33 of this law.
The entity to be privatized by public auction shall prepare the
privatization program in compliance with the regulation referred to in
article 40 of this law.
The entity to be privatized that undergoes restructuring and interested
creditors shall prepare the Restructuring program in compliance with the
regulation referred to in article 20 paragraph 5 of this law.
The Agency may prepare the documentation referred to in paragraph 1 of
this article or the programs referred to in paragraphs 2 and 3 of this
article, which shall be obligatory for the entity to be privatized.
Article 22
The privatization program shall specifically contain: data on business
operations, the value of capital or property, and organizational
structure of the entity to be privatized.
The privatization program shall be incepted by the competent body of the
entity to be privatized.
The privatization program shall be submitted to the Agency no later than
90 days from the date on which the initiative was launched.
Within 30 days from the date on which the privatization program is
submitted, the Agency must decide to accept the program, return the
program for corrections and/or amendments in accordance with regulations
on the content and manner of preparation of privatization program.
The entity to be privatized must effect any change or amendment to the
privatization program within the period indicated by the Agency, and
which cannot be longer than 60 days from the date when the decision
referred to in paragraph 4 of this article was made.
If the Agency does not make the decision referred to in paragraph 4 of
this article, the privatization program is deemed accepted.
The entity to be privatized must comply with the decision of the Agency.
If the entity to be privatized does not comply with the decision of the
Agency, the Agency shall carry out further procedure of privatization in
accordance with the law.
Article 23
The restructuring program shall contain, in particular, information
about the business operations, the value of capital and property, the
amount of debts, the methodology for paying the debts, the entity's
chances of achieving a successful restructuring, and the welfare
program.
The restructuring program shall be incepted by the competent bodies of
the entity to be privatized and shall be approved by creditors holding a
majority of the debt against the entity to be privatized.
The majority creditor, referred to in paragraph 2 of this article, is
one or more creditors claiming more than 50% of the total debt of the
entity to be privatized.
Within 90 days from the date of the decision on privatization
initiative, the entity to be privatized is obliged to deliver the
restructuring program to the Agency.
Within 30 days from the date on which the restructuring program is
submitted, the Agency must decide to accept or reject the restructuring
program, or on returning the restructuring program for corrections
and/or changes.
The entity to be privatized must effect any change or amendment to the
restructuring program within the period determined by the Privatization
Agency and which cannot be longer than 60 days from the date when the
decision referred to in paragraph 5 of this article was made.
The Agency may extend the deadline referred to in paragraph 4 of this
article to a maximum of 90 days, at the request of the entity to be
privatized or of the creditors holding a majority of the debt against
the entity to be privatized if there are valid reasons for such
extension.
If the entity to be privatized does not comply with the decision of the
Agency, the Agency shall carry out further procedure of privatization in
accordance with the law.
5. Capital and property valuation
Article 24
The entity to be privatized shall provide, based on evaluation, a range
for the value of its capital or its property.
The Agency shall control the evaluation referred to in paragraph 1.
The entity to be privatized is obliged to express in terms of shares the
value of capital referred to in paragraph 1. of this article.
The price at which the capital or property will be sold is formed on the
basis of market conditions.
The Government of the Republic of Serbia shall set forth the methodology
for valuing capital and property of the entity to be privatized.
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III. CAPITAL PRIVATIZATION
1. Sale of
capital
Article 25
The entity to be privatized shall sell 70% of the capital to be
privatized.
The entity to be privatized shall sell less than 70% of the capital to
be privatized, if the purchaser shall not accept the offer of 70%.
In the entity to be privatized, which is in restructuring procedure in
accordance to the provisions of this law, all of the capital or property
shall be offered for sale.
The stakes of a parent company or of a holding with majority state/or
socially owned capital in subsidiary companies can be sold exclusively
in privatization procedure for parent company or holding.
1.1. Public Tender
Article 26
The sale of capital and property by public tender is the method of
privatization whereby offers of potential purchasers are publicly
gathered in compliance with determined conditions of sale.
Tender sale shall be organized and conducted by the Agency.
Article 27
The tender sale procedure encompasses: preparation of tender sale,
public invitation for offer submission, submission and acceptance of
offers, opening and evaluation of offers, contract signing, and other
operations of importance for tender procedure.
Article 28
The Agency shall announce public invitation for participation in tender.
Public invitation referred to in paragraph 1 of this article shall
contain: name and other information regarding the entity to be
privatized, ownership structure of capital, percentage of capital
offered for sale, and other data of importance for informing of
participants.
Article 29
Ministry in charge of privatization affairs shall form a Commission,
which is supervising the implementation of tender sale (hereinafter: the
Tender Commission).
Tender Commission shall have president and four members.
The Tender Commission, upon the Agency's proposal, shall approve results
of the tender sale.
Tender Commission produces and submits a report of its activity to the
Agency, within 15 days from the date of tender sale completion.
The report, referred to in paragraph 4 of this article, shall be
submitted to the ministry in charge of privatization affairs, which, in
turn, is required, upon its receipt, to inform the Government of the
Republic of Serbia.
Article 30
The bidder pays a deposit for participation in tender.
Ministry in charge of privatization determines the value of deposit and
the method of payment of deposit from paragraph 1 of this article.
Article 31
The entity to be privatized, during the tender procedure, cannot make a
decision about decreasing or increasing the capital, reorganization and
restructuring, investments, sale of part of property, or sign a
long-term business arrangement, without prior approval of ministry in
charge of privatization affairs.
Article 32
After the tender sale procedure has been conducted, the Agency shall
inform all participants of the tender of the results of the procedure
and/or about the determination of purchaser.
The participant has the right to object to the legality of conducted
procedure.
The objection shall be submitted to the ministry in charge of
privatization affairs, within 8 days from the date when the participant
received notification of the results of the public tender.
Decision will be made, within 8 days after the submission of the
objection.
Decision reached on the objection is final.
Article 33
The Government of the Republic of Serbia shall prescribe in more details
the procedure and manner for the sale of capital and property through
the method of public tender.
1.2. Public Auction
Article 34
The sale of capital and/or property by public auction is the method of
privatization through public contest of potential purchasers in
compliance with the determined conditions of sale.
Auction sale shall be organized by the Agency.
Article 35
The procedure of sale of capital and property by public auction
contains: preparation of auction, submission and registration of
participants, conducting the auction, contract conclusion and other
operations of importance for auction.
Article 36
Sale by means of public auction shall be conducted by the Auction
Commission, which shall be formed by the Agency.
Auction Commission shall have a president and four members.
Article 37
Auction Commission shall conduct an auction, register all entities that
are entitled to participate at the auction, declare the buyer, declare
the auction unsuccessful, sign the record of auction and perform other
operations of importance for auction.
Auction Commission shall compose a record about its work, as well as the
report about the results of public auction and shall deliver this report
to the Agency, the ministry in charge of privatization affairs, and the
government of the Republic of Serbia, within 15 days from the date of
completion of sale by public auction.
Article 38
Agency shall announce public invitation for participation in auction.
Public invitation shall be announced at least 15 days prior to the date
of the auction.
Public invitation referred to in paragraph 1 of this article shall
contain: name of the entity to be privatized, location, address, date
and time of the auction, amount and manner of paying a deposit for
participation in auction, and other data of importance for conducting
the auction.
Public invitation referred to in paragraph 1 of this article may contain
the obligation of buyer regarding investment in privatization subject,
resolution of employees' issues, securing continuity of business
operations, and environmental protection.
Public invitation is published via Internet on a special web site of the
Government of the Republic of Serbia, in domestic and foreign mass
media, which will be determined by the Minister in charge of
privatization affairs.
Article 39
Auction participants are obliged to pay the deposit.
Ministry in charge of privatization affairs determines the value and
mode of payment of deposit from paragraph 1 of this article.
Article 40
The Government of the Republic of Serbia shall prescribe in more details
the procedure and manner for the sale of capital and property through
the method of public auction.
1.3. Contract of Sale
Article 41
Contract of sale of capital and/or property shall specifically contain
the following provisions: contracting parties, subject of sale, agreed
price, payment period, the usage of the land and other provisions
subject to agreement of the contracting parties.
When the purchaser, the entity to be privatized, and the Agency sign the
agreement on selling the capital or property of the entity to be
privatized, the contract of sale shall be deemed concluded.
Funds received from the sale during the privatization procedure shall be
paid into the account of the Budget of Republic of Serbia.
Contract referred to in paragraph 1 of this article, shall be ratified
in court only after the evidence from article 12 paragraph 3 of this law
is submitted, along with the agreement from the ministry in charge of
privatization affairs.
2. Free of charge transfer of capital
2.1. Transfer of shares to employees
Article 42
Part of the capital of the entity to be privatized shall be transferred
to employees, free of charge in the form of shares.
The employees, referred to in paragraph 1 of this article, shall mean
citizens of the Republic of Serbia who are:
1. Current employees, or those who had previously been employed in the
entity to be privatized;
2. Employees of a parent enterprise or subsidiary if the entity to be
privatized is a subsidiary or parent enterprise.
Previously employed persons referred to in paragraph 2. line 1. of this
article shall include pensioners.
Article 43
The employees shall be entitled to acquire shares free of charge based
upon each full year of employment in such entity.
The right to acquire shares free of charge may be exercised up to a
maximum of 35 years of employment.
The right to acquire shares free of charge cannot be exercised for those
entities to be privatized if less than 50% of the socially owned capital
has been sold, as well as for those entities to be privatized which are
undergoing the restructuring procedure.
Article 44
The entity to be privatized shall reach the decision on issuing the
shares free of charge and shall inform the employees through a public
invitation.
The public invitation referred to in paragraph 1 of this article shall
contain information on the date, time and location of registering of
shares, the number of shares, the nominal value of the shares as well as
other information in accordance with the decision on free of charge
issuance of shares.
The public invitation referred to in paragraph 1 of this article shall
be announced on the notice board of the entity to be privatized, in the
Official Gazette of the Republic of Serbia, and in one daily newspaper.
2.1.1. Transfer of shares to the employees in the procedure of public
auction
Article 45
The capital allocated for acquiring shares free of charge in the
procedure of public auction sale can amount to:
3. 30 per cent of the value of the capital to be privatized, if the sale
by public auction is completed within 18 months from the effective date
of this law;
4. 20 per cent of the value of the capital to be privatized, if the sale
by public auction is completed in the period of 19 to 30 months from the
effective date of this law;
5. 10 per cent of the value of the capital to be privatized, if the sale
by public auction is completed after 30 months from the effective date
of this law.
Article 46
The employees shall be entitled to acquire shares free of charge, in the
procedure of sale through a public auction, in accordance with article
43 of this law, where the total nominal value equals:
6. The Dinar equivalent of 400 DEM using the official exchange rate on
the date of the publication of the public invitation referred to in
Article 44, paragraph 1 of this law for each full year of employment, if
the sale by public auction is completed within 18 months;
7. The Dinar equivalent of 300 DEM using the official exchange rate on
the date of the publication of the public invitation referred to in
Article 44, paragraph 1 of this law for each full year of employment, if
the sale by public auction is completed in the period of 19 to 30
months;
8. The Dinar equivalent of 150 DEM using the official exchange rate on
the date of the publication of the public invitation referred to in
Article 44, paragraph 1 of this law for each full year of employment, if
the sale by public auction is completed after 30 months.
Article 47
The period for exercising the right to shares free of charge referred to
in Article 45 and 46 of this law shall commence on the date of
effectiveness of this law.
Article 48
The shares that remain after the sale through the method of public
auction, as well as after the transfer of free shares under the
conditions and in the manner prescribed in Article 44 and Article 45 of
this law, shall be transferred to the Share Fund for sale.
2.1.2. Transfer of shares to employees in the procedure of sale by
public tender
Article 49
The capital subject to being acquired free of charge by the employees of
the entity to be privatized by means of public tender shall amount to a
maximum of 15% of the capital being privatized.
In case referred to in paragraph 1 of this article, the employees shall
be entitled to free of charge acquisition of shares in the total nominal
value of the Dinar equivalent of 400 DEM for each full year of
employment using the official exchange rate at the date of announcing
the public invitation referred to in article 44. paragraph 1 of this
law, but for no more than 35 years of employment, regardless of the
period in which the entity is privatized.
The shares that shall remain after the completion of the sale by public
tender, as well as after the transfer of free shares, shall be recorded
in the Privatization Registry.
2.1.3. Proportional reduction of entitlement to acquisition of shares
free of charge
Article 50
If the value of capital allocated for acquisition of shares free of
charge is less than the total nominal value of shares to be acquired by
employees free of charge, the employees are entitled to a lesser number
of shares, in proportion to the ratio of those values.
2.1.4. Rights arising from shares transferred free of charge to
employees
Article 51
The shares transferred to employees free of charge are ordinary shares
and shall be registered in the name of acquirer.
The shares shall bear the rights to:
1. Management;
2. Dividends;
3. Participation in the division of the bankruptcy estate of the entity
after payments to creditors.
2.2. Transfer of shares to citizens
2.2.1. Recording of shares in the Privatization Registry
Article 52
The shares of the entity to be privatized through public tender shall be
recorded in the Privatization Registry in an amount of at least 15% of
the capital to be privatized.
The entity to be privatized is obliged to, within 15 days from the date
of fulfilling the conditions for registering of the shares, inform the
ministry in charge of privatization affairs for the purpose of
registering the shares in the Privatization Registry.
Shares recorded in the Privatization Registry shall be distributed to
citizens within two years after the expiration of the period set for
privatization process.
Article 53
The dividend on account of shares recorded in the Privatization
Registry, pending the transfer to citizens, shall be transferred to the
Republic Fund in charge of Pension and Disability Insurance.
The shares recorded in the Privatization Registry shall have no
management rights until their transfer to citizens.
2.2.2.
Transfer of the capital recorded in the Privatization Registry to
citizens
Article 54
Citizens of the Republic of Serbia who are over 18 years of age on the
effective date of the decision to transfer the capital to citizens
reached by the Government of the Republic of Serbia are entitled to
acquisition of shares free of charge, which are recorded in the
Privatization Registry.
The citizens referred to in paragraph 1 of this article shall acquire
the right to an equal part of capital expressed in shares free of
charge.
The entitlement to acquiring shares free of charge shall not be accorded
to citizens who have already exercised the right to free transfer of
shares, fully or partially, pursuant to this law.
The Government of the Republic of Serbia shall set forth the method of
acquisition, distribution and other issues pertaining to the shares
recorded in the Privatization Registry.
3. Contract on the change of form of organization of entities being
privatized
Article 55
After the sale of capital, free of charge transfer of shares to the
employees, and recording the shares in Privatization Register,
shareholders shall enter into a contract, which regulates transformation
of privatization entity into a corporation.
The contract referred to in paragraph 1 of this article, apart from the
articles of association, which are contained in the founding document,
in accordance with the law, which regulates legal status of companies,
shall also contain provisions on other issues, which are of importance
for organizing the entity to be privatized into a corporation.
The contract referred to in paragraph 1 of this article shall be deemed
concluded when signed by shareholders or their representatives who hold
majority of all shares of the entity being privatized.
4. Costs of the privatization procedure
Article 56
The costs of the Privatization Agency in the privatization procedure
shall be borne by the entity to be privatized.
Minister in charge of privatization affairs shall determine the level of
the costs referred to in paragraph 1. of this article.
5. Corresponding application
Article 57
The provisions of this law relating to shares are equally applicable to
stakes.
6. Central registry
Article 58
The Central Registry shall issue certificates to the entities that have
been privatized, based on which the Book of Shareholders shall be kept.
The entity referred to in paragraph 1. of this article, on the basis of
certificate issued by the Central Registry, is required to make an entry
of the new shareholder into the Book of Shareholders.
Rights from shares shall be proven by the certificate issued by the
Central Register.
7. Trading of shares
Article 59
Shares issued in the privatization process shall be freely tradable on
the secondary market.
Trading of shares shall proceed via the stock exchange.
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IV. ALLOCATION
OF PROCEEDS FROM PRIVATIZATION
Article 60
The proceeds from the privatization process shall be used to finance:
1. Republic's Fund in charge of Pension and Disability Insurance;
2. Stimulation of development;
3. Paying out of compensation to persons whose property was
nationalized;
4. Repayment of debts incurred or guaranteed by the Republic of Serbia;
5. Costs of sales in privatization procedures;
6. Special development program for economy and environmental protection,
which is established by the administrative body of territorial autonomy
and local authority.
7. Other purposes.
Article 61
10 per cent of the cash proceeds of each sale of capital shall be paid
on account of the Republic Fund in charge of Pension and Disability
Insurance.
5 per cent of the cash proceeds of each sale shall be allocated for the
purpose of compensating persons whose property was nationalized.
5 per cent of the cash proceeds of each sale shall be allocated for
financing the development of the infrastructure of the territorial
autonomy where the headquarters of the entity to be privatized are
located.
5 per cent of the cash proceeds of each sale shall be allocated for
financing the development of the infrastructure of local authority where
the headquarters of the entity to be privatized are located.
The costs of tender sale shall be covered from the proceeds in the
amount of their actual value.
The Government of the Republic of Serbia shall determine the amount of
proceeds to be allocated to financing the development and settling of
debt incurred or guaranteed by the Republic of Serbia, and determines
other allocations from article 60. line 7. of this law, as well as the
amount of proceeds assigned to these allocations.
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V. SUPERVISION
OVER IMPLEMENTATION OF THE LAW
Article 62
The supervision over implementation of the law and regulations based on
this law shall be carried out by the ministry in charge of privatization
affairs.
Supervision over the functioning of the Government of Republic of Serbia
and the ministry in charge of privatization affairs during the
privatization implementation shall be administered by the appropriate
committee of the National Assembly of the Republic of Serbia.
Ministry in charge of privatization affairs is required to submit to the
appropriate committee of the National Assembly of the Republic of
Serbia, regular monthly reports on: progress of the privatization
process, signed contracts on capital and property sale with submitted
contracts, initiated privatization procedures, work of institutions in
charge of privatization implementation as in article 4 of this law, as
well as provide all necessary data and information upon request by the
appropriate committee.
Article 63
The supervision referred to in article 62 of this law includes the
control over operations related to sale of shares from privatization
process over stock exchange, until the shares are not listed on the
stock exchange.
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VI. PENALTY CLAUSES
1. Commercial
offence
Article 64
The entity to be privatized shall be fined for a commercial offence with
a fine from 10,000 to 450,000 Dinars if it :
1. Acts contrary to the provision of article 12, paragraph 2 of this
law;
2. Launches the privatization procedure without the initiative for
privatization from the competent body (article 16. paragraph 1);
3. Fails to submit to the Agency the privatization initiative and
prospectus in prescribed and timely manner (article 16 paragraph 4);
4. Fails to submit the prospectus to the Agency within prescribed
deadline (article 16. paragraph 6);
5. Fails to submit privatization program or restructuring program to the
Agency within the prescribed deadline (article 22, paragraph 3 and
article 23 paragraph 4);
6. Fails to incorporate the correction or, respectively, the change into
the privatization program within the deadline set by the Agency (article
22. paragraph 5);
7. Fails to incorporate the correction or, respectively, the change into
the restructuring program within the deadline set by the Agency (article
23. paragraph 6);
8. Fails to conduct the sale of the stake of parent company, and / or of
the holding company with majority state owned or socially owned capital
in the subsidiary company exclusively within privatization procedure for
the parent company and/or the holding company (article 25. paragraph 4);
9. Transfers the shares free of charge to employees in violation of
stipulations given in articles 42 and 43 of this law;
10. Violates the provisions of article 44 of this law;
11. Violates the provisions of articles 45 and 46 of this law;
12. Violates the provisions on free of charge share transfer to the
employees (article 49);
13. Fails to record the shares in the Privatization Registry in the
prescribed amount and deadline (article 52, paragraphs 1 and 2.).
The responsible person in the privatization entity shall also be fined
from between 10,000 to 30,000 Dinars for the commercial offences
referred to in paragraph 1 of this article.
2. Violations
Article 65
Individuals that acquire shares free of charge based on false data,
contrary to the provisions of this law (article 42 and article 54),
shall be fined from 1,000 to 10,000 Dinars.
In addition to fines under paragraph 1 of this article, property
acquired through violations. shall be confiscated.
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VII. TRANSITIONAL AND
FINAL PROVISIONS
1. Rights of
the enterprises for which privatization has been carried out pursuant to
previous regulations
Article 66
In enterprise for which privatization of a part of the socially-owned
and state-owned capital has been performed in conformity with the
provisions of the Law on Socially-owned Capital ("The Official Gazette
of the SFRY" No. 84/89 and 46/90), the Law on the Conditions and
Procedure of Socially-owned Property Transformation Into Other Forms of
Property ("The Official Gazette of the RS" No. 48/91, 75/911, 48/94 and
51/94), the non-privatized part of socially-owned or state-owned capital
shall be privatized in accordance with this law.
2. Transfer of shares to the Shares Fund and trading of shares
Article 67
The shares for which no public invitation has been made for their
registration and sale prior to the effectiveness date of this law in
companies which have carried out the privatization of a part of socially
and/or state owned capital in accordance with the Law on Ownership
Transformation ("The Official Gazette of the RS" No. 32/97 and 10/2001)
shall be transferred to the Share Fund.
Article 68
The shares of the shareholders who stopped payments of the subscribed
shares, issued pursuant to the Law on Socially-owned Capital ("The
Official Gazette 0of the SFRY" No. 84/89 and 46/90), the Law on the
Conditions and Procedure of the Socially-owned Property Transformation
Into Other Forms of Property ("The Official Gazette of the RS" No.
48/91, 75/911, 48/94 and 51/94), and the Law on Ownership Transformation
("The Official Gazette of the RS" No. 32/97and 10/2001), shall be
transferred to the Share Fund.
Article 69
The Share Fund shall sell the transferred shares, except for the shares
that the ministry in charge of privatization affairs decides to record
in the Privatization registry.
Shares from paragraph 1. of this article shall be sold through the
public auction or through brokers at the stock exchange.
In exception to paragraph 2 of this article, shares may be sold through
public offer or public tender in accordance with law.
Article 70
The Share Fund conducts the sale of shares, which have been transferred
to the Republic's Fund for Pensions and Disability payments up to the
date of effectiveness of this law.
The proceeds from the sale of the shares of the Republic's fund in
charge of Pensions and Disability Insurance shall be transferred in
their full amount to that Fund.
Article 71
The Share Fund shall is obliged to sell the shares specified under
Article 67. through to Article 70. of this law no later than six years
from the effective date of this law.
Article 72
The Share Fund may simultaneously sell all the shares in a single
company, which it holds, as well as sell the shares on behalf of other
shareholders.
If the Share Fund simultaneously sells all shares in a single company
transferred to it, than it may send an invitation to the other
shareholders, in case they are interested in selling their shares in a
joint offer.
Article 73
Trading of shares acquired pursuant to the Law on Socially-owned Capital
("The Official Gazette of the SFRY" No. 84/89 and 46/90), the Law on the
Conditions and Procedure of the Socially-owned Property Transformation
Into Other Forms of Property ("The Official Gazette of the RS" No.
48/91, 75/911, 48/94 and 51/94) and the Law on Ownership Transformation
("Official Gazette of the RS" No. 32/97 and 10/2001) is free and shall
be conducted through the stock exchange.
The shares referred to in paragraph 1 of this article cannot be traded
as of the effective date of this law, if the data about state of shares
in the enterprise are not harmonized with the data in Central Registry,
or Temporary Registry.
Enterprises are obliged to harmonize data referred to in paragraph 2 of
this article within four months from the effective date of this law.
If the enterprises do not harmonize the data within the deadline
stipulated in paragraph 3 of this article the Privatization Agency shall
implement the harmonization of data at the expense of the enterprise.
The shareholders who had acquired shares based upon stipulations in
paragraph 1 of this article shall not have the right of preferred
purchase.
3. Rights to shares free of charge
Article 74
The persons who exercised their right to acquiring shares free of charge
in accordance with the Law on Ownership Transformation ("Official
Gazette of the RS" No. 32/97 and 10/2001) do not have the same right
under this law.
4. Use of capital evaluation
Article 75
The entity to be privatized, which received the decision on capital
evaluation pursuant to the Law on Ownership Transformation ("Official
Gazette of RS" No. 32/97 and 10/2001), shall not be obliged to conduct
capital valuation.
The provision of paragraph 1 of this article applies also to capital
valuations, which prior to the date of entry into force of this law were
submitted to the Directorate for Capital Valuation for the purpose of
control and verification, and were found by the ministry in charge of
privatization affairs to have been done in accordance with the law from
paragraph 1 of this article.
5. Temporary Registry of Shares
Article 76
Until the formation of the Central Registry, the Temporary Registry will
be formed as a part of the Agency.
The Temporary Registry shall record data on shareholders, type of
shares, number of shares, as well as change of this data.
The Temporary Registry shall issue certificates for recording the data
referred to in paragraph 2 of this article into the Book of Shareholders
of the entities privatized.
The Minister in charge of privatization affairs shall set forth in a
detailed manner the content and manner of the Temporary Registry's
administration.
6. Abolishment of the Directorate for Evaluation of Capital
Article 77
The Directorate for evaluation of capital shall cease to work at the
date of effectiveness of this law.
The ministry in charge of privatization affairs will continue to control
and to verify the process of ownership transformation and the process of
capital valuation that have been started but not completed, as well as
to control the capital valuation of entities subjected to status change.
7. Revocation of regulations
Article 78
On the effective date of this law, the Law on Ownership Transformation
("Official Gazette of RS" No. 32/97 and 10 /2001) and the ensuing
regulations shall be revoked.
8. Entry into force
Article 79
This law shall enter into force on the eighth day following the date of
its publication in the "Official Gazette of Republic of Serbia".
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